Most warranties follow a standard claims procedure. Once you notice that something is wrong with your car you take it to your preferred repair shop (or to the dealership if it’s a car you purchased new). Most warranty companies require that the shop be professional, with licensed technicians. This prevents people from taking their car to a friend to be fixed in their home garage.
The shop will diagnose the problem to find out what the cause is. Once they know what the cause is they will then submit an estimate with a complete description of the problem to the warranty company, or the manufacturer.
The warranty company will then either approve, deny, or request more information. Once the estimate is approved the shop is then free to complete the repairs. It is important to note that no warranty will cover the cost of wearable parts. A wearable part is any part that needs to replaced with routine maintenance over time. Some examples are brake pads, brake rotors, wiper blades, tires, glass, gas, etc.
For example, brake pads are a wearable part that need to be replaced with regular maintenance over time and as such are not eligible to be replaced under warranty. However, the brake caliper is not a wearable part and would be eligible to be replaced under warranty should it become faulty.
In most instances if a wearable part needs to be replaced because of the failure of a separate, non-wearable part, the warranty company will replace both the wearable and non wearable part assuming the non-wearable part is covered under the warranty.
So, if a brake caliper failed and wore the brake pads to the point of needing replacement, the warranty company would most likely replace both the caliper and the brake pads. We say ‘most likely’ because all situations are unique and it is not a definite thing that this would happen in all cases.
After the repairs are completed, either the warranty company will pay the repair shop directly and you may pay a deductible (if there is one in your warranty policy), or you will pay the repair shop in full and the warranty company will reimburse you.
Not all warranties are created equally, but it is common practice for reputable companies to pay the repair shop directly, relieving you of that burden.
Many warranty policies contain a deductible that can range anywhere from $100 to $250. A deductible is the portion of the repair that you must pay directly to the shop.
For example, let’s say you have a repair that costs $2,000 that is covered under your warranty. If your policy has a $100 deductible that means that the warranty company will pay the repair shop $1,900 and you will pay the $100 deductible directly to the shop.
In the next article in our series about warranties we will discuss how a warranty can protect your credit score.